S&P 500 futures have fallen 0.5%, while Dow Jones Industrial Average futures have declined 92 points, or 0.4%. Nasdaq Composite futures have dropped 0.7%. While stocks are dropping, safe assets are rallying, as gold futures have gained 1% to $1,329 an ounce, and the 10-year Treasury has fallen 0.06 percentage point to 2.1%.

Rhino Trading's Michael Block takes the market's temperature:

[S&P 500 futures are 12 points but almost eleven] handles off of the overnight low made after the genius in Pyongyang fired a ballistic missile over Japan last night....And so it goes. Scary and yet we still have to think that mutually assured destruction at least registers somewhere in someone’s brain on the Korean Peninsula...With all of this, stocks are lower, Treasuries and gold are higher, and crude is slightly in the red but has been flipping around all night. Unfortunately, Harvey is still menacing Texas and Louisiana and the ramifications of that are still murky for energy and for markets in general. We continue to see the silver lining in the Harvey cloud, as relief could be stimulus and the impetus to more of the same, and any slowdown in second half growth and/or uncertainty in the affected regions of the U. S. could push the Fed to back off on any potential policy mistakes. That would be good for stocks and bonds.

Hilltop Securities' Mark Grant calls North Korea and Venezuela the "wild cards dancing upon the world's stage." He explains:

North Korea, once again, is “Futterwacken Vigorously” as it shoots a missile over a Japanese island and threatens peace on Earth.

You may hold what opinion about the North Korean leader that you like but I think the guy is out of his mind, and that is the way he should be played. He is quickly coming up on a “Bridge Too Far” and he is toying with a line in the sand that will finally cause Japan and South Korea and perhaps the U.S. to respond. There is a point, I state, where a stringent response will come.

I have projected a 2.00% yield on the ten year Treasury, this year, based upon the flow of money created by the world’s central banks...The person of questionable intelligence in charge of North Korea can bring us to 2.00% much quicker, of course. A missile here, and a bomb there, and we will be there before you know it. The equity markets will take the opposite tack, of course, as risk assets are shunned for safe havens. Consequently, when real risk is identified, and I think we have that established now, dislocations can be expected and actions should become predicated upon the risk.

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